Gazprom fears that quotas for hot-rolled metal of Ukrainian and South Korean origin will result in the large diameter pipes price increase and the monopolization of the sphere.
Thus, the gas monopoly has joined a list of those not in favor of the EEC decision.
The decision of the European Economic Commission to impose a special protective measure on the import of hot-rolled metal from Ukraine and South Korea will increase Gazprom’s expenses on buying large diameter pipes by 15%, the company said. While the Russian market will be threatened by monopolization with vertically integrated metal companies dominating.
The volume of the quota is 1.3 million tons; all the rest will be subject to a 20% duty.
The decision follows the investigation initiated by MMK, NLMK and Severstal. They claimed that rolled metal imports were growing because of the excessive production of steel in the world as well as protective measures adopted by US, EU and Turkey in 2015-2017.
EEC thought the quota would be enough, but the metal companies believed it would not protect the market from the foreign pressure.
But Gazprom does not agree with them. The group said in Q2 its largest suppliers were Zagorsky Pipe Works, TMK and Izhorsky Pipe Works. So far Gazprom has been witnessing the drop in price for LDP, but it is slowing down: in 2018 the drop was 17%, while in Q1 2019 – 5%. (Ukrainian metal)